Financial Analysis

Note 2 Water and Wastewater Utility Acquisitions Completed Acquisitions In July 2025, the Company acquired the wastewater utility system of the City of Beaver Falls, Pennsylvania for $ 37,750 . The system serves approximately 3,200 customers in the City of Beaver Falls and also provides bulk transmission and treatment service for approximately 3,800 equivalent dwelling units in seven nearby municipalities. The preliminary purchase price allocation for this acquisition consisted primarily of property, plant and equipment of $ 29,900 and goodwill of $ 7,850 . In April 2025, the Company acquired the Village of Midvales water system in Ohio, which serves approximately 1,000 customers for $ 2,950 . In January 2025, the Company acquired Greenville Sanitary Authoritys wastewater utility assets, which serve approximately 2,300 customers in Greenville, Pennsylvania for $ 18,000 . In October 2024, the Company acquired wastewater utility assets in Morgan County, Indiana, which serve approximately 100 customers for $ 500 . In May 2024, the Company acquired the wastewater utility assets of Westfield HOA, which serve approximately 200 customers within Westfield Homeowners Subdivision in Glenview, Illinois for a cash purchase price of $ 67 . In July 2023, the Company completed the following water utility asset acquisitions: Shenandoah Borough, Pennsylvania, which serves approximately 2,900 customers for $ 12,291 ; La Rue, an Ohio municipality, which serves approximately 300 customers for $ …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

"Note 10 Commitments and Contingencies Commitments The Company maintains agreements with other water purveyors for the purchase of water to supplement its water supply, particularly during periods of peak demand. The agreements stipulate purchases of minimum quantities of water to the year 2032. The estimated annual commitments related to such purchases through 2030 are expected to average $ 1,966 , and the aggregate of the years remaining approximates $ 1,949 . The Company has entered into purchase obligations, in the ordinary course of business, that include agreements for water treatment processes at some of its wells in a small number of its divisions. The 20 year term agreement provides for the use of treatment equipment and media used in the treatment process and are subject to adjustment based on changes in the Consumer Price Index. The future contractual cash obligations related to these agreements are as follows: 2026 2027 2028 2029 2030 Thereafter $ 1,263 $ 1,272 $ 952 $ 981 $ 1,010 $ 1,042 The Companys natural gas supply is provided by sources on the interstate pipeline system and from local western Pennsylvania gas well production. The Company has various interstate pipeline service agreements that provide for firm transportation capacity, firm storage capacity, and other services and include capacity reservation charges based upon the maximum daily and annual contract quantities set forth in the agreements. Some of these agreements have minimum volume obligations …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

2025 Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Revenues from contracts with customers: Residential $ 731,818 $ 165,257 $ 708,049 $ - Commercial 208,617 41,738 141,275 - Fire protection 46,998 - - - Industrial 41,619 2,477 3,150 - Gas transportation & storage - - 242,186 - Other water 62,870 - - - Other wastewater - 13,294 - - Other utility - - 29,541 10,937 Revenues from contracts with customers 1,091,922 222,766 1,124,201 10,937 Alternative revenue program 667 337 ( 6,326 ) - Other and eliminations - - - 30,111 Consolidated $ 1,092,589 $ 223,103 $ 1,117,875 $ 41,048 2024 Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Revenues from contracts with customers: Residential $ 662,909 $ 146,849 $ 504,426 $ - Commercial 186,534 36,951 100,662 - Fire protection 42,409 - - - Industrial 34,831 2,724 2,279 - Gas transportation & storage - - 194,413 - Other water 80,964 - - - Other wastewater - 12,898 - - Other utility - - 30,436 11,226 Revenues from contracts with customers 1,007,647 199,422 832,216 11,226 Alternative revenue program 3,850 ( 265 ) 10,775 - Other and eliminations - - - 21,242 Consolidated $ 1,011,497 $ 199,157 $ 842,991 $ 32,468 2023 Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Revenues from contracts with customers: Residential $ 641,351 $ 139,188 $ 519,406 $ - Commercial 180,731 35,530 111,272 - Fire protection 41,257 - - - Industrial 33,949 2,087 3,232 - Gas transportation & sto …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Note 16 Employee Stock and Incentive Plan Under the Companys Amended and Restated Equity Compensation Plan, (the Plan) approved by the Companys shareholders on May 2, 2019, to replace the 2004 Equity Compensation Plan, stock options, stock units, stock awards, stock appreciation rights, dividend equivalents, and other stock-based awards may be granted to employees, non-employee directors, and consultants and advisors. The Plan authorizes 6,250,000 shares for issuance under the plan. A maximum of 3,125,000 shares under the Plan may be issued pursuant to stock award, stock units and other stock-based awards, subject to adjustment as provided in the Plan. During any calendar year, no individual may be granted (i) stock options and stock appreciation rights under the Plan for more than 500,000 shares of common stock in the aggregate or (ii) stock awards, stock units or other stock-based awards under the Plan for more than 500,000 shares of Company stock in the aggregate, subject to adjustment as provided in the Plan. Awards to employees and consultants under the Plan are made by a committee of the Board of Directors, except that with respect to awards to the Chief Executive Officer, the committee recommends those awards for approval by the non-employee directors of the Board of Directors. In the case of awards to non-employee directors, the Board of Directors makes such awards. At December 31, 2025, 790,028 shares were still available for issuance under the Plan. No further grant …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 13 Fair Value of Financial Instruments Financial instruments are recorded at carrying value in the financial statements and approximate fair value, with the exception of long-term debt, as of the dates presented. The fair value of these instruments is disclosed below in accordance with current accounting guidance related to financial instruments. The fair value of loans payable is determined based on its carrying amount and utilizing Level 1 methods and assumptions. As of December 31, 2025 and 2024, the carrying amount of the Companys loans payable was $ 150,139 and $ 186,542 , respectively, which equates to their estimated fair value. The fair value of cash and cash equivalents is determined based on Level 1 methods and assumptions. As of December 31, 2025 and 2024, the carrying amounts of the Company's cash and cash equivalents were $ 34,778 and $ 9,156 , respectively, which equates to their fair value. The Companys assets underlying the deferred compensation and non-qualified pension plans are determined by the fair value of mutual funds, which are based on quoted market prices from active markets utilizing Level 1 methods and assumptions. As of December 31, 2025 and 2024, the carrying amount of these securities was $ 33,862 and $ 31,324 , respectively, which equates to their fair value, and is reported in the consolidated balance sheet in deferred charges and other assets. Unrealized gains and losses on equity securities held in conjunction with our non-qualified pen …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 8 Income Taxes Income tax benefit for the years ended December 31, is comprised of the following: Years Ended December 31, 2025 2024 2023 Current: Federal $ - $ - $ 1,913 State 6,623 5,920 11,487 6,623 5,920 13,400 Deferred: Federal 1,521 ( 4,583 ) ( 103,617 ) State ( 4,699 ) ( 23,173 ) 23,772 ( 3,178 ) ( 27,756 ) ( 79,845 ) Total income tax expense/(benefit) $ 3,445 $ ( 21,836 ) $ ( 66,445 ) The statutory Federal tax rate is 21 % for 2025, 2024, and 2023. For states with a corporate net income tax, the state corporate net income tax rates range from 2.25 % to 9.50 % for the years presented. The Companys effective income tax rate for 2025, 2024, and 2023 was 0.6 %, ( 3.8 )%, and ( 15.4 )%, respectively. The Company remains subject to examination by federal and state tax authorities for the tax years of 2022 through 2025. The differences between income taxes expected at the federal statutory rate and the reported income tax benefit are described below: Year Ended December 31, 2025 Amount Percentage US Federal statutory tax rate $ 130,166 21.0 % State and local income tax, net of Federal income tax effect (a) 2,336 0.4 % Changes in valuation allowances 108 0.0 % Nontaxable or nondeductible items 7,948 1.3 % Changes in unrecognized tax benefits 1,294 0.2 % Other adjustments: Plant basis differences ( 114,892 ) ( 18.6 %) Amortization of excess deferred income taxes ( 6,476 ) ( 1.0 %) Release of income tax reserve regulatory liability (b) ( 10,218 ) ( 1.6 %) Other ( 6,821 ) ( …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 11 Leases The Company leases land, office facilities, office equipment, and vehicles for use in its operations, which are accounted for as operating leases. Leases with a term of 12 months or less are not recorded on the balance sheet; rather, lease expense is recognized over the lease term. Our leases have remaining lives of 1 to 69 years. Some of the Companys leases can be extended on a month-to-month basis, which allow us to terminate the lease at any given month without penalty while others include options to extend the leases for up to 50 years. The renewal of a month-to-month lease is at our sole discretion. The Company accounts for lease and non-lease components of lease arrangements separately. For calculating lease liabilities, we may deem lease terms to include options to extend or terminate the lease when its reasonably certain that we will exercise that option. The Companys lease agreements do not contain significant residual value guarantees, restrictions or covenants. Lease liabilities and corresponding right-of-use assets are recorded based on the present value of the lease payments over the expected lease term, including leases with variable payments that are based on a market rate or an index and net of any impairment. All other variable payments are expensed as incurred. Since the Companys lease agreements do not provide an implicit interest rate, we utilize our incremental borrowing rate to determine the discount rate used to present value the lease pa …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Note 12 Long-term Debt and Loans Payable Long-term Debt The consolidated statements of capitalization provide a summary of long-term debt as of December 31, 2025 and 2024. The supplemental indentures with respect to specific issues of the first mortgage bonds restrict the ability of Aqua Pennsylvania and other operating subsidiaries of the Company to declare dividends, in cash or property, or repurchase or otherwise acquire the stock of these companies. Loan agreements for Aqua Pennsylvania and other operating subsidiaries of the Company have restrictions on minimum net assets. As of December 31, 2025, restrictions on the net assets of the Company were $ 5,321,334 of the total $ 6,857,456 in net assets. As of December 31, 2025, $ 2,924,447 of Aqua Pennsylvanias retained earnings of $ 2,944,447 and $ 431,127 of the retained earnings of $ 646,538 of other subsidiaries were free of these restrictions. Some supplemental indentures also prohibit Aqua Pennsylvania and some other subsidiaries of the Company from making loans to, or purchasing the stock of, the Company. Sinking fund payments are required by the terms of specific issues of long-term debt. Excluding amounts due under the Companys revolving credit agreement and commercial paper program, the future sinking fund payments and debt maturities of the Companys long-term debt are as follows: Interest Rate Range 2026 2027 2028 2029 2030 Thereafter 0.00 % to 0.99 % $ 231 $ 199 $ 199 $ 199 $ 1,091 $ 5,409 1.00 % to 1.99 % 1,076 2 …

LongTermDebtTextBlock · excerpt; the full note is in the filing

"Recent Accounting Pronouncements - Pronouncements to be adopted upon the effective date: In November 2024, the FASB issued ASU 2024-03, Income Statement ReportingComprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses . The standard update improves the disclosures about a public business entitys expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of adoption of the standard update on its financial statement disclosures. In March 2024, the U.S. Securities and Exchange Commission (SEC) issued its final climate disclosure rule, which requires the disclosure of Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports and registration statements, when material. A number of petitions have been filed in federal courts seeking to challenge the SECs climate disclosure rule. As a result, in April 2024, the SEC placed a pause on its implementation of the new rule. Depending on the outcome of the …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Note 17 Pension Plans and Other Post-retirement Benefits The Company maintains a qualified, defined benefit pension plan that covers its full-time employees who were hired prior to the date their respective pension plan was closed to new participants. Retirement benefits under the plan are generally based on the employees total years of service and compensation during the last five years of employment. The Companys policy is to fund the plan annually at a level which is deductible for income tax purposes and which provides assets sufficient to meet its pension obligations over time. To offset some limitations imposed by the Internal Revenue Code with respect to payments under qualified plans, the Company has a non-qualified Supplemental Pension Benefit Plan for Salaried Employees in order to prevent some employees from being penalized by these limitations, and to provide certain retirement benefits based on employees years of service and compensation. The net pension costs and obligations of the qualified and non-qualified plans are included in the tables which follow. Employees hired after their respective pension plan was closed, may participate in a defined contribution plan that provides a Company matching contribution on amounts contributed by participants and an annual profit-sharing contribution based upon a percentage of the eligible participants compensation. The Companys qualified defined benefit pension plan has a permanent lump sum option on the form of benefit pa …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Note 19 Segment Information The Company identifies a business as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the chief operating decision maker (CODM), who is the Companys Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The CODM reviews financial information, such as budget-to-actual variances and comparisons against prior period, at the operating segment level, and uses that information when making decisions about the allocation of operating and capital resources to each segment. The CODM evaluates the performance of the Companys reportable segments based on a number of factors, the primary measure being the net income (loss) of each segment. The Company has eleven operating segments and has two reportable segments, the Regulated Water segment and the Regulated Natural Gas segment. The Regulated Water segment is comprised of eight operating segments representing its water and wastewater regulated utility companies, which are organized by the states where the Company provides water and wastewater services. The eight water and wastewater utility operating segments are aggregated into one reportable segment, because each of these operating segments has the following similarities: economic characteristics, nature of services, product …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"Note 1 Summary of Significant Accounting Policies Nature of Operations - Essential Utilities, Inc. (Essential Utilities, the Company, we, our, or us) is the holding company for regulated utilities providing water, wastewater, or natural gas services concentrated in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, and Kentucky under the Aqua and Peoples brands. One of our largest operating subsidiaries is Aqua Pennsylvania, Inc., which accounted for approximately 57 % of our Regulated Water segments operating revenues and approximately 72 % of our Regulated Water segments income for 2025. Aqua Pennsylvanias service territory is located in the suburban areas north and west of the City of Philadelphia and in 28 other counties in Pennsylvania. The Companys other regulated water or wastewater utility subsidiaries provide similar services in seven additional states. Our Peoples subsidiaries provide natural gas service to approximately 747,000 customers in western Pennsylvania and Kentucky. Approximately 95 % of the total number of natural gas utility customers we serve are in western Pennsylvania. The Company also operates market-based activities, conducted through its non-regulated subsidiaries, that provide utility service line protection solutions and repair services to households and gas marketing and production activities. Execution of Agreement and Plan of Merger with American Water On October 26, 2025, American Water Works Company, Inc. (A …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Note 14 Stockholders Equity At December 31, 2025, the Company had 600,000,000 shares of common stock authorized; par value $ 0.50 . Shares outstanding and treasury shares held were as follows: December 31, 2025 2024 2023 Shares outstanding 283,082,809 274,823,591 273,296,037 Treasury shares 3,423,086 3,386,069 3,299,191 At December 31, 2025, the Company had 1,770,819 shares of authorized but unissued Series Preferred Stock, $ 1.00 par value. On January 23, 2026 , the Companys Board of Directors declared a quarterly cash dividend of $ 0.3426 per share, payable March 2, 2026 , to all shareholders of record on February 9, 2026 . We expect to pay $ 96,996 in connection with this dividend. In March 2024, the Company filed a new universal shelf registration with the SEC to allow for the potential future offer and sale by the Company, from time to time, in one or more public offerings, of an indeterminate amount of our common stock, preferred stock, debt securities, and other securities specified therein at indeterminate prices. This registration statement is effective for three years and replaces a similar filing that expired in the second quarter of 2024. The Company has an acquisition shelf registration statement on file with the SEC which permits the offering, from time to time, of an aggregate of $ 500,000 in shares of common stock and shares of preferred stock in connection with acquisitions. The balance remaining available for use under the acquisition shelf registration stat …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Note 3 Water and Wastewater Utility Acquisitions Completed Acquisitions In July 2025, the Company acquired the wastewater utility system of the City of Beaver Falls, Pennsylvania for $ 37,750 . The system serves approximately 3,200 customers in the City of Beaver Falls and also provides bulk transmission and treatment service for approximately 3,800 equivalent dwelling units in seven nearby municipalities. The preliminary purchase price allocation for this acquisition consisted primarily of property, plant and equipment of $ 29,900 and goodwill of $ 7,850 . The pro-forma effect of this acquisition is not material either individually or collectively to the Companys results of operations. In April 2025, the Company acquired the Village of Midvales water system in Ohio, which serves approximately 1,000 customers for $ 2,950 . In January 2025, the Company acquired Greenville Sanitary Authoritys wastewater utility assets, which serve approximately 2,300 customers in Greenville, Pennsylvania for $ 18,000 . In October 2024, the Company acquired wastewater utility assets in Morgan County, Indiana, which serve approximately 100 customers for $ 500 . In May 2024, the Company acquired the wastewater utility assets of Westfield HOA, which serve approximately 200 customers within Westfield Homeowners Subdivision in Glenview, Illinois for a cash purchase price of $ 67 . Except for the City of Beaver Falls, Pennsylvania acquisition, the purchase price allocation for the above water and wast …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 15 Commitments and Contingencies The Company is routinely involved in various disputes, claims, lawsuits and other regulatory and legal matters, including both asserted and unasserted legal claims, in the ordinary course of business. The status of each such matter, referred to herein as a loss contingency, is reviewed and assessed in accordance with applicable accounting rules regarding the nature of the matter, the likelihood that a loss will be incurred, and the amounts involved. As of September 30, 2025, the aggregate amount of $ 22,429 is accrued for loss contingencies and is reported in the Companys condensed consolidated balance sheet as other accrued liabilities and other liabilities. These accruals represent managements best estimate of probable loss (as defined in the accounting guidance) for loss contingencies or the low end of a range of losses if no single probable loss can be estimated. For some loss contingencies, the Company is unable to estimate the amount of the probable loss or range of probable losses. Further, Essential Utilities has insurance coverage for certain of these loss contingencies, and as of September 30, 2025, estimates that approximately $ 769 of the amount accrued for these matters are probable of recovery through insurance, which amount is also reported in the Companys condensed consolidated balance sheet as deferred charges and other assets, net. During a portion of 2019, the Company initiated a do not consume advisory for some of its …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Three Months Ended Three Months Ended September 30, 2025 September 30, 2024 Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Revenues from contracts with customers: Residential $ 201,815 $ 42,999 $ 58,993 $ - $ 182,616 $ 37,450 $ 49,398 $ - Commercial 59,786 11,062 12,003 - 52,577 9,779 9,838 - Fire protection 12,210 - - - 10,670 - - - Industrial 11,695 610 227 - 9,747 1,043 228 - Gas transportation & storage - - 30,067 - - - 27,576 - Other water 16,130 - - - 23,631 - - - Other wastewater - 3,852 - - - 3,450 - - Other utility - - 6,643 2,685 - - 9,334 2,677 Revenues from contracts with customers 301,636 58,523 107,933 2,685 279,241 51,722 96,374 2,677 Alternative revenue program 416 795 517 - 782 55 357 - Other and eliminations - - - 4,466 - - - 4,047 Consolidated $ 302,052 $ 59,318 $ 108,450 $ 7,151 $ 280,023 $ 51,777 $ 96,731 $ 6,724 Nine Months Ended Nine Months Ended September 30, 2025 September 30, 2024 Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Revenues from contracts with customers: Residential $ 550,913 $ 122,810 $ 463,998 $ - $ 499,859 $ 109,097 $ 326,921 $ - Commercial 157,296 30,766 93,540 - 140,110 27,569 66,417 - Fire protection 35,239 - - - 31,793 - - - Industrial 30,933 1,860 2,013 - 26,527 2,149 1,475 - Gas transportation & storage - - 168,151 - - - 133,458 - Othe …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Note 10 Stock-based Compensation Under the Companys Amended and Restated Equity Compensation Plan (the Plan), stock options, stock units, stock awards, stock appreciation rights, dividend equivalents, and other stock-based awards may be granted to employees, non-employee directors, and consultants and advisors. At September 30, 2025, 682,381 shares were still available for issuance under the Plan. Performance Share Units A performance share unit (PSU) represents the right to receive a share of the Companys common stock if specified performance goals are met over the three year performance period specified in the grant, subject to exceptions through the respective vesting period, which is generally three years . Each grantee is granted a target award of PSUs and may earn between 0 % and 200 % of the target amount depending on the Companys performance against the performance goals. The performance goals of the 2025 grants consisted of the following metrics: Metric 1 Companys total shareholder return (TSR) compared to the TSR for a specific peer group of investor-owned utilities (a market-based condition) 40.00 % Metric 2 Achievement of a three-year average return on equity target (a performance-based condition) 30.00 % Metric 3 Achievement of a consolidated operations and maintenance expense target over a three-year measurement period (a performance-based condition) 30.00 % The following were the assumptions used in the pricing model for the 2025 grants: 2025 Expected term (yea …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 8 Financial Instruments Financial instruments are recorded at carrying value in the financial statements and approximate fair value as of the dates presented. The fair value of these instruments is disclosed below in accordance with current accounting guidance related to financial instruments. There have been no changes in the valuation techniques used to measure fair value, or asset or liability transfers between the levels of the fair value hierarchy for the nine months ended September 30, 2025 . The fair value of loans payable is determined based on its carrying amount and utilizing Level 1 methods and assumptions. As of September 30, 2025 and December 31, 2024, the carrying amount of the Companys loans payable was $ 96,366 and $ 186,542 , respectively, which equates to their estimated fair value. The fair value of cash and cash equivalents is determined based on Level 1 methods and assumptions. As of September 30, 2025 and December 31, 2024, the carrying amounts of the Company's cash and cash equivalents was $ 6,397 and $ 9,156 , respectively, which equates to their fair value. The Companys assets underlying the deferred compensation and non-qualified pension plans are determined by the fair value of mutual funds, which are based on quoted market prices from active markets utilizing Level 1 methods and assumptions. As of September 30, 2025 and December 31, 2024, the carrying amount of these securities was $ 32,858 and $ 31,324 , respectively, which equates to their f …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 6 Goodwill The following table summarizes the changes in the Companys goodwill, by business segment: Regulated Water Regulated Natural Gas Other Consolidated Balance at December 31, 2024 $ 58,425 $ 2,277,447 $ 4,841 $ 2,340,713 Goodwill acquired 7,850 - - 7,850 Reclassification to utility plant acquisition adjustment ( 4 ) - - ( 4 ) Balance at September 30, 2025 $ 66,271 $ 2,277,447 $ 4,841 $ 2,348,559 One of our subsidiaries in the Regulated Water segment has a mechanism that allows the reclassification of goodwill to utility plant acquisition adjustment. The mechanism provides for the transfer over time, and the recovery through customer rates, of goodwill associated with some acquisitions upon achieving specific objectives. …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Note 16 Income Taxes The Companys effective tax rate was an expense of 4.5 % and a benefit of 2.5 % for the three and nine months ended September 30, 2025, respectively. The Companys effective tax rate was an expense of 18.6 % and 1.7 % for the three and nine months ended September 30, 2024, respectively. The decrease in income tax expense in the third quarter of 2025 is primarily attributed to the net increase in tax benefit associated with the tax deduction for continued qualifying infrastructure investment, offset by decreases in both the state tax benefit and amortization of tax repairs surcredit in the Regulated Natural Gas segment based on a rate order received in September 2024. The increase in the income tax benefit for the first nine months of 2025 is primarily attributed to the release of $ 22,575 of income tax reserve regulatory liability in the Regulated Water segment based on the rate order received by Aqua Pennsylvania in February 2025, offset by the decreases in both the state tax benefit and amortization of tax repairs surcredit in the Regulated Natural Gas segment based on a rate order received in September 2024. In determining its interim tax provision, the Company reflects its estimated impact from its permanent and flow-through tax differences . The Company uses the flow-through method to account for the repairs tax deduction for qualifying utility infrastructure at its regulated Pennsylvania and New Jersey subsidiaries. The statutory Federal tax rate is 2 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 11 Pension Plans and Other Postretirement Benefits The Company maintains a qualified defined benefit pension plan (the Pension Plan), a nonqualified pension plan, and other postretirement benefit plans for certain of its employees. The following tables provide the components of net periodic benefit cost for the Companys pension and other postretirement benefit plans: Pension Benefits Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Service cost $ 304 $ 358 $ 912 $ 1,072 Interest cost 3,991 3,908 11,973 11,724 Expected return on plan assets ( 4,266 ) ( 4,696 ) ( 12,798 ) ( 14,088 ) Amortization of prior service cost 78 82 234 244 Amortization of actuarial loss 833 751 2,499 2,253 Net periodic benefit cost $ 940 $ 403 $ 2,820 $ 1,205 Other Postretirement Benefits Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Service cost $ 372 $ 363 $ 1,116 $ 1,089 Interest cost 1,132 1,113 3,396 3,337 Expected return on plan assets ( 1,071 ) ( 1,105 ) ( 3,213 ) ( 3,315 ) Amortization of actuarial gain ( 401 ) ( 267 ) ( 1,203 ) ( 801 ) Net periodic benefit cost $ 32 $ 104 $ 96 $ 310 The net periodic benefit cost is based on estimated values and an extensive use of assumptions about the discount rate, expected return on plan assets, the rate of future compensation increases received by the Companys employees, mortality, turnover, and medical costs. The Company presents the components of net periodic benefit cost othe …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Note 2 Revenue Recognition The following table presents our revenues disaggregated by major source and customer class: Three Months Ended Three Months Ended September 30, 2025 September 30, 2024 Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Revenues from contracts with customers: Residential $ 201,815 $ 42,999 $ 58,993 $ - $ 182,616 $ 37,450 $ 49,398 $ - Commercial 59,786 11,062 12,003 - 52,577 9,779 9,838 - Fire protection 12,210 - - - 10,670 - - - Industrial 11,695 610 227 - 9,747 1,043 228 - Gas transportation & storage - - 30,067 - - - 27,576 - Other water 16,130 - - - 23,631 - - - Other wastewater - 3,852 - - - 3,450 - - Other utility - - 6,643 2,685 - - 9,334 2,677 Revenues from contracts with customers 301,636 58,523 107,933 2,685 279,241 51,722 96,374 2,677 Alternative revenue program 416 795 517 - 782 55 357 - Other and eliminations - - - 4,466 - - - 4,047 Consolidated $ 302,052 $ 59,318 $ 108,450 $ 7,151 $ 280,023 $ 51,777 $ 96,731 $ 6,724 Nine Months Ended Nine Months Ended September 30, 2025 September 30, 2024 Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Water Revenues Wastewater Revenues Natural Gas Revenues Other Revenues Revenues from contracts with customers: Residential $ 550,913 $ 122,810 $ 463,998 $ - $ 499,859 $ 109,097 $ 326,921 $ - Commercial 157,296 30,766 93,540 - 140,110 27,569 66,417 - Fire protection 35,239 - - - 31,793 - - - …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Note 14 Segment Information The Company identifies a business as an operating segment if: i) it engages in business activities from which it may earn revenues and incur expenses; ii) its operating results are regularly reviewed by the chief operating decision maker (CODM), who is the Companys Chief Executive Officer, to make decisions about resources to be allocated to the segment and assess its performance; and iii) it has available discrete financial information. The CODM reviews financial information, such as budget-to-actual variances and comparisons against prior period, at the operating segment level, and uses that information when making decisions about the allocation of operating and capital resources to each segment. The CODM evaluates the performance of the Companys reportable segments based on a number of factors, the primary measure being the net income (loss) of each segment. The Company has eleven operating segments and two reportable segments. The Regulated Water segment is comprised of eight operating segments representing its water and wastewater regulated utility companies, which are organized by the states where the Company provides water and wastewater services. The eight water and wastewater utility operating segments are aggregated into one reportable segment, because each of these operating segments has the following similarities: economic characteristics, nature of services, production processes, customers, water distribution or wastewater collection m …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Note 18 Subsequent Events Captive Insurance Subsidiary On October 1, 2025, the Company established a wholly-owned captive insurance company, Utility Insurance LLC, incorporated in the State of Utah, whose principal activity at this time is to provide insurance and reinsurance coverage for a portion of the Companys general liability, property, workers compensation, auto liability, cyber and management liability risks. Execution of Agreement and Plan of Merger with American Water On October 26, 2025, American Water Works Company, Inc. (American Water), Alpha Merger Sub, Inc., a direct wholly owned subsidiary of American Water (Merger Sub), and the Company, entered into an Agreement and Plan of Merger (the Merger Agreement). The Merger Agreement provides that upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the Merger), with the Company surviving the Merger as a wholly owned subsidiary of American Water. Subject to the terms and conditions of the Merger Agreement, at the time at which the Merger becomes effective (the Effective Time), each share of the Companys common stock, par value $ 0.50 per share (Essential Common Stock), issued and outstanding immediately prior to the Effective Time, other than any shares of Essential Common Stock owned by American Water or Merger Sub or by the Company as treasury stock (in each case, other than restricted shares), will be converted into the right to receive 0. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing